A coalition of 34 advocacy groups, labour unions and trade associations have written a letter, urging the FTC to stop the USD 8.45 billion acquisition of MGM by Amazon, calling it a “clear example of Amazon’s larger pattern of monopolistic practices.” The letter says that the acquisition "is not simply a one-off deal for streaming content; it is the latest move in Amazon’s overarching strategy to create number interconnected points of dominance over businesses and consumers.
The letter explains how the coalition believes Amazon uses its control over its retail platform to copy successful products that it then sells under its own product lines, how it excludes businesses from its “Buy Box”, unless sellers pay very high for Fulfilled by Amazon and advertisement placement. The letter says the company has used its dominance to destroy rivals in the markets for baby care products and smart speakers by pricing its own products below-cost.
“The trend is clear: accept Amazon’s dominance or it will turn its entire ecosystem against you. The House Antitrust Subcommittee detailed there and other abuses in its Digital Markets report last year, but Amazon has continued to abuse its monopoly power,” the letter said.
Additional levers of power
The letter said the acquisition will give Amazon even more power in the digital economy, giving it control over must-have content, and over additional advertising and IP rights that will be allow it to stretch its dominance over consumers and businesses. It will increase the company’s ability to lock consumers into its platform and punish businesses and workers that do not agree to its demands.
If the deal goes through, MGM content, including the Rocky and James Bond franchise, will become exclusive to Amazon Prime. This could lead to a forceful exclusion of rivals. For example, the letter states, Amazon could “destroy rivals to its Fire TV products by denying other streaming platforms access to its content.” The MGM portfolio also includes IP for content such as sequels or gaming rights that the company could use to further exert leverage over its e-commerce platform. The letter says Amazon could force competitors to prioritise Amazon content and product placement within non-Amazon products in exchange for access to content or IP rights. Finally, with more control over the streaming, advertising, and media distribution ecosystem, Amazon would be able to extract unfair concessions from independent content producers and workers in the industry.
“All of this means Amazon can exert greater control even outside of the portions of commerce it directly owns. And ultimately it means consumers, businesses, and the workers that depend on them are subject entirely to Amazon’s whims,” the groups said.
